Question: Albuquerque, Inc., acquired 32,000 shares of Marmon Company several years ago for $750,000. At the acquisition date, Marmon reported a book value of $870,000, and Albuquerque assessed the fair value of the noncontrolling interest at $165,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses.
At the present time, Marmon reports $950,000 as total stockholders' equity, which is broken down as follows: Common stock ($10 par value) $ 400,000 Additional paid-in capital 290,000 Retained earnings 260,000 Total $ 950,000 Marmon sells 10,000 and 8,000 shares of previously unissued common stock to the public for $32 and 20 per share. Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this stock transaction? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)
| Common stock ($10 par value) |
$400,000 |
| Additional paid-in capital |
290,000 |
| Retained earnings |
260,000 |
| Total |
$950,000 |
Record the entry to recognize the impact of the sell of 8,000 shares.